ANALYSIS: Preference Cases Go Bust as Chapter 11 Filings Boom (1)

This year has seen a resurgence of Chapter 11 filings, but over the last three months, adversary proceedings (ancillary lawsuits connected with main bankruptcy cases) asserting preference actions have dropped to their lowest levels in the past three years.

Monthly totals of adversary proceeding filings with the Nature of Suit (NOS) code for preference dropped to 36 cases in May and 55 cases in June. July has only had 49 cases thus far, but with five days left in the month, it’s unlikely to lose its status as one of the slowest months of the last three years.

Last fall, ...